Reply to: Weak Substitution and no right of termination

[pmeswani]

The way pension funds have been mismanaged, the insane charges they incur and the inflexibility you have in accessing you own cash within them, they would be the last place I put my money.

Still, each to his own.

Nomadd

Hence why I would recommend a SIPP. That way, the only person that can mismanage the pension is oneself.

[nomadd]

I asked the agent about dropping my personal name from the contract, but no dice. The best they will offer is something like "[my name] or another representative agreed in writing".

Taking all your replies into account, I think I will fall back on my primary IR35 defence, namely shovelling most of my earnings into my pension to make myself a less attractive target.

The way pension funds have been mismanaged, the insane charges they incur and the inflexibility you have in accessing you own cash within them, they would be the last place I put my money.

Still, each to his own.

Nomadd

[icarus]

I asked the agent about dropping my personal name from the contract, but no dice. The best they will offer is something like "[my name] or another representative agreed in writing".

Taking all your replies into account, I think I will fall back on my primary IR35 defence, namely shovelling most of my earnings into my pension to make myself a less attractive target.

[nomadd]

Leaving because you can't deliver what is required becuase of the client's problems is a different matter and not really subject to notice anyway.

But who ever sees it that way under termination circumstances?

The client? Certainly not: you are just a contractor, so you must be at fault.

The Agent? You must be kidding - they will try to withhold payment, blame you, force you to go back, anything in order to "protect" their client (in other words, "get their money".)

The one thing I've learnt in my years of contracting is that in those rare situations when things do turn bad, you are on your own as a contractor. Hence I prefer a contract with a clean "get out" clause - just in case I ever need it!

Cheers,

Nomadd

[malvolio]

The best answer I've seen came from Accountax, that zero notice periods are a useful IR35 pointer - permies can't have them, and it kills one element of MOO - but not that good in business terms. Best compromise is a long on on your side and a short one on theirs.

That said, we're not here to like the client, but to deliver things. Walking away because you're not happy is pathetic. Leaving because you can't deliver what is required becuase of the client's problems is a different matter and not really subject to notice anyway.

[original PM]

and anyway lets be honest

if you contract does not accurately reflect your working conditions it ain't worth the paper it is written on.

any amiguiaty and HMRC will check your actual working practices and relationship with the client and make a decision based on that



probably.

[nomadd]

Your decision. Many qualified experts would appear to disagree...

And as I said, just as many qualified experts appear to agree. That's what experts are for, disagreeing with each other.

There is no "expert" advice surrounding IR35; that's the whole problem with it - it's so deliberately vague.

As I say, I do it (notice clause) for more than IR35 reasons. The thought that I can get out if the client turns out to be a first class a-hole means a lot to me. Twenty years of contracting have taught me that lesson.

Nomadd

[pmeswani]

Your decision. Many qualified experts would appear to disagree...

A two-way notice period is always a nice to have.... but can be seen as a pointer for IR35. (Could be wrong!). I would try and push for a mutual notice period if the contract is for a long periods of time (e.g. 12 months+). But I would agree about getting the contractor's name removed in favour of the business name.

[malvolio]

I'll go against the flow and say I always, always *insist* on even-handed notice periods

Your decision. Many qualified experts would appear to disagree...

[nomadd]

I'm reviewing my new contract and there are a couple of clauses that make me very nervous about IR35:

1. "The Consultant: [My name] or any other consultant as agreed in writing by [Agency]"

The agency say that this is a satisfactory substitution clause, but it looks a bit weak to me.

2. "The Supplier does not have the right to terminate this agreement"

Wow - even an ordinary employee has the right to quit their job. I've never seen a clause like this before.

My accountant calls it "borderline". Anyone have any thoughts?

Point 1: Get it changed so your name isn't in it.

Point 2: I'll go against the flow and say I always, always *insist* on even-handed notice periods; usually 4 weeks either way. I never accept contracts with no notice clauses, having had a couple of "nightmare" contracts in the past. The master-servant implications of one-sided clauses also bother me as regards IR35. But, as others have said, you can read it BOTH ways, and this issue on it's own is not enough to determine IR35 status.

Nomadd

[pmeswani]

Nonsense. Look at it form the client's viewpoint. He's paying you to deliver a known piece of work. How delighted would he be if you wander off halfway through? Why should he make it easy for you to do so? Why would the agency voluntarily help you terminte a live contract that's earning them money? (hint: agents absolutely hate contractors who bail part way through a contract). If you absolutely have to get out early (it happens) then first find someone to do the work for you, that's what your RoS clause is for.

You want to be a contractor, behave like one.

Agreed. You can't call up the agent and say "Terminate my contract because I don't want to work here any more". If there is a "genuine" reason, like a death in the family, or an illness that is preventing you from finishing the work, then that would be reasonable grounds for an early termination. It's not a good practice to follow, but can be used if necessary. It may burn a few bridges....so don't use it all the time.

[pmeswani]

You want to be a contractor, behave like one.

I just want an IR35-compliant contract so I can get to work. All my other contracts have had notice periods and my accountant said that notice periods were the norm. If a No Termination clause makes my contract IR35 stronger then I say bring it on!

Thanks for your advice.

A non-termination clause is not an IR35 pointer (own it's own). It can be seen as you are being in control of the client, however, what the rest of your contract says will be the deciding factor. Get your contract reviewed by the likes of Abbey Tax or another IR35 Contract specialists.

[icarus]

[QUOTE=malvolio;894129]You want to be a contractor, behave like one.[QUOTE]

I just want an IR35-compliant contract so I can get to work. All my other contracts have had notice periods and my accountant said that notice periods were the norm. If a No Termination clause makes my contract IR35 stronger then I say bring it on!

Thanks for your advice.

[malvolio]

Thanks for your reply. Does this mean that "The Supplier does not have the right to terminate this agreement" is acceptable as long as there is a clause like "the Supplier has the right to ask the agency to terminate"? Doesn't the contract need to be clear that I can somehow decide to quit? Otherwise it looks like total control of my company by the agency.

Nonsense. Look at it form the client's viewpoint. He's paying you to deliver a known piece of work. How delighted would he be if you wander off halfway through? Why should he make it easy for you to do so? Why would the agency voluntarily help you terminte a live contract that's earning them money? (hint: agents absolutely hate contractors who bail part way through a contract). If you absolutely have to get out early (it happens) then first find someone to do the work for you, that's what your RoS clause is for.

You want to be a contractor, behave like one.

[icarus]

To have a non-supplier-termination clause in a contract is not unusual. If there is a clause in the contract that allows the agency to terminate the contract, then all you need to do is to pick up the dog and bone and ask the agency to terminate. Give them a reason to end your contract.

Thanks for your reply. Does this mean that "The Supplier does not have the right to terminate this agreement" is acceptable as long as there is a clause like "the Supplier has the right to ask the agency to terminate"? Doesn't the contract need to be clear that I can somehow decide to quit? Otherwise it looks like total control of my company by the agency.